Yahoo Finance Petrol prices: UK supermarkets and fuel retailers ‘ripping off drivers’, RAC says
Even as wholesale costs of both unleaded petrol and diesel in the UK are falling due to the Omicron variant, pumps are increasing their prices for their own gains, the RAC has said.
The automotive services company said drivers of petrol cars are losing out £5.5m ($7.3m) a day based on current prices and is urging retailers to cut pump prices immediately.
RAC spokesperson Simon Williams told the BBC: "Drivers are being ripped off." He said the UK's supermarkets account for selling 50% of fuel and remain slow to pass on any drop in wholesale rates to customers. "Prices go up like a rocket, but fall like a feather," Williams told Radio 4's Today programme.
Wholesale petrol prices fell 10p in November to their lowest levels since September, while the cost of wholesale diesel fell by 7p.
The RAC said the fall is due to the discovery of the Omicron COVID variant, with a barrel of oil falling to $70.90 at the end of November, down from $84.74 at the start. At the time of writing, brent crude futures (BZ=F) were trading at $71.78.
Despite this, on average 3.1p was added to the price of a litre of unleaded, which cost 147.28p at the end of November. 2.7p to diesel was added to the cost of diesel, which ended last month costing 150.64p on average.
Prices for both fuels peaked at record highs on 21 and 20 November respectively — petrol 147.72p per litre and diesel 151.1p.
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The RAC said “there is absolutely no justification for the high prices being charged on forecourts,” urging them to cut prices by around 12p a litre for petrol and 7p for diesel, or at least “clearly explain” the reasons for the price hike.
It said that the high cost of fuel is hurting drivers at the worst possible time with Christmas just around the corner, and adding to the unprecedented pressure on household incomes.
“Much earlier in the pandemic we saw retailers’ margin on fuel understandably increase as the oil price plummeted on the back of people being told to stay at home," said RAC fuel spokesman Simon Williams.
"Despite the news of a new COVID variant, we are in a completely different world now with car use near to pre-pandemic levels so retailers shouldn’t be taking huge profits on every litre of fuel they sell."
The association said supermarket chains who are major fuel retailers, such as Asda, Sainsbury's (SBRY.L), Tesco (TSCO.L) and Morrisons, should have cut prices, but have instead increased them "unnecessarily".
"Since COVID they've been far more reluctant to pass on any savings, even though the frequency with which they buy means they are in a position to pass on any savings in the wholesale price to drivers far more quickly," Williams told the BBC.
The RAC said it welcomed the chancellor’s fuel duty freeze last month, but said the government can do more. It also said the financial benefits of running an electric car for those drivers who can afford to make the switch are clear.
RAC Fuel Watch data shows that the cheapest petrol currently on sale is from Asda supermarkets where a litre costs on average 144.47p, with Morrisons not far behind at 145.52p.
It’s the same for diesel, with Asda charging 147.47p a litre and Morrisons 148.69p.
